[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

Textile unit closures may surge amid rising gas prices: BTMA

Bangladesh Textile Mills Association president Showkat Aziz Russell on Tuesday said that textile sector in Bangladesh might experience a surge in factory closures as a result of further hike in gas prices...

www.newagebd.net

Textile unit closures may surge amid rising gas prices: BTMA
Staff Correspondent 18 February, 2025, 22:33

Bangladesh Textile Mills Association president Showkat Aziz Russell speaks at a press conference in the capital Dhaka on Tuesday. | Press release

Bangladesh Textile Mills Association president Showkat Aziz Russell on Tuesday said that textile sector in Bangladesh might experience a surge in factory closures as a result of further hike in gas prices.

He said that despite hiking the gas price by nearly 179 per cent in 2023, the government still could not ensure uninterrupted gas supply to the industries.

‘In this scenario, if the government doubles the gas prices, Bangladesh’s textile sector will never become sustainable and the sector will lose its competitiveness,’ he added.

He said that it would also be a hindrance in getting fresh investments and bank finance.

The BTMA president was speaking at a press conference on the upcoming Dhaka International Textile and Garment Machinery Exhibition (DTG) in the capital Dhaka on the day.

Responding to a question, he said that it was high time to attract investment to Bangladesh, as Chinese factories were phasing out from the textile business.

‘China is shifting towards high-end industries, leading to closure of some apparel, textile and footwear companies. Moreover, a number of businesses are relocating from China due to rising labour costs,’ he added.

He said that US president Donald Trump had imposed an additional 10 per cent import duty on Chinese goods, resulting in some businesses moving their operations elsewhere.

‘To attract this investment, the government must ensure stable utility prices and an uninterrupted supply of fuel and gas. If we can secure some of these investments, it will help create employments in our country,’ he added.

He also expressed concerns over frequent policy changes. He urged the government to include industry representatives in Bangladesh Petroleum Corporation and Titas Gas boards to oversee gas procurement and distribution processes.

Regarding the national election, he said that the announcement of the national polls was necessary so that they could plan their investments.

Russell also pointed out that the textile industry had lost competitiveness over the years due to rising business costs, particularly as utility prices continued to increase.

Regarding the yarn import from India, he said that if there had been an uninterrupted supply of gas, they would not have imported much yarn from the neighbouring country.

‘Bangladesh imported yarn worth $2.7 billion in recent times as our factories are sitting idle due to gas shortage. For this reason, a number of workers have become jobless and now they are doing various miscreant activities,’ he added.

He also said that the past government did not explore gas, but completed contracts to buy gas from spot markets, which led to dollar crises. The problems are still persistent as most of the contracts were long-term, he said.

The BTMA, in collaboration with Yorkers Trade & Marketing Service Co, Limited, Hong Kong, will organise the 19th edition of DTG from February 20 to 23 at the International Convention City Bashundhara in the capital Dhaka.​

 

[Bilal9]

Garments industry textile leftovers are being converted to biodegradable Poly-ethylene sheeting (for bags) by ECOVIA who have a patent on the process. The bags degrade in about 180 days and turn into fertilizer.

 

[Saif]

Bangladesh should annually review minimum RMG wage amid inflation pressure: Study

Bangladesh should annually review its wage-setting process, as apparel workers in the country who are paid the minimum wage are losing income year-on-year due to current inflation rates, said a policy brief from Cornell University. The brief, titled “Waiting Game: Minimum Wage-Setting

thefinancialexpress.com.bd

Bangladesh should annually review minimum RMG wage amid inflation pressure: Study
Monira Munni
Published :
Feb 21, 2025 23:20
Updated :
Feb 21, 2025 23:21

Bangladesh should annually review its wage-setting process, as apparel workers in the country who are paid the minimum wage are losing income year-on-year due to current inflation rates, said a policy brief from Cornell University.

The brief, titled “Waiting Game: Minimum Wage-Setting in Bangladesh’s Apparel Industry”, by the Global Labor Institute (GLI), a part of Cornell University ILR School, was published recently. It made five key recommendations, including institutionalising the annual review of minimum wages and scheduling a review of the 2023 minimum wage in 2025.

The GLI, which is dedicated to independent quantitative research and action, analysed Bangladesh’s national minimum wage-setting policy as the new government plans major updates to labour laws and practices.

The researchers note that the long-time minimum wage policy—which reviews wages every five years—combined with high inflation, favours employers over workers.

In addition, they noted that the local ‘purchasing power’ of workers’ wages in Bangladesh is significantly lower than that of workers in competing apparel-producing countries.

Regarding employers’ argument that rising labour costs in a labour-intensive sector would make their industry less competitive, the brief showed that there is no evidence to support this. It also highlighted that the experiences of Vietnam, Indonesia, Cambodia, and other countries in recent years undermine this argument.

Citing data, the brief said apparel brands and retailers' advocacy for meaningfully higher wages and a regular wage-setting process has been ineffective. The 2023 wage revision and the fall of the Hasina government in 2024 have drawn the industry’s attention once again.

As a result, the researchers are calling on Bangladesh’s government to simplify the minimum wage structure and adjust wages annually.

It also recommended that “genuine trade union representatives chosen by labour federations be appointed to a wage board.”

Speaking to The Financial Express on Thursday, Jason Judd, executive director of Cornell ILR, explained that Cambodia’s apparel industry is a good example for Bangladesh to follow, citing growth in wages and output.

Judd, who is in Bangladesh for a short visit until Friday, said the Cambodian government took a similar approach when it overhauled its wage-setting policy a decade ago.

“The experience of Cambodia’s apparel industry in remarkably similar circumstances is very clear,” he said, adding that a decade ago, after street protests and government violence against workers, brands joined the campaign for change, and wages and output have grown steadily since.

“Wages have grown regularly alongside orders and output since then in Cambodia,” he told The Financial Express.

He cited one of the Institute’s reports conducted in 2023, where workers interviewed estimated spending Tk 3,500 on medicine and Tk 2,000 on electricity at home in the hottest months when they had to run a fan constantly to sleep.

Monthly bills of this size equal 61 per cent of the average monthly rent payment of Tk 9,000, and workers reported borrowing against their personal belongings and paying high interest rates to afford electricity and medicines in May, June, and July.

“The Bangladesh industry’s price advantage has been maintained in part because of this downward pressure on real income for workers, as their low wages and the five-year review period work to keep production prices down and, therefore, enable competition with larger countries like China,” he said.

“There is a clear need and room—both political and economic—for an annual wage-setting process in Bangladesh. It’s long overdue. Imagine waiting five years for a raise while inflation rages [sic] at 10 per cent—that’s the situation for workers under the current scheme,” he said.

The brief said concrete actions the government of Bangladesh can take in the coming months include collecting explicit reassurances from brands that they support wage increases through higher prices. This includes references to labour-costing practices and the persistence of below-cost pricing by brands.

Other recommendations included distinguishing genuine worker representatives from others in the wage-setting process and social dialogue more generally.

It also called for extending freedom of association and bargaining rights to workers in export processing zones, complementing democratic representation of workers and wage enforcement efforts.​

 

[Saif]

RMG exports to all markets rise in first half of FY25

Exports to the European Union (EU), the United States, the United Kingdom, Canada, and other emerging markets have all increased.

en.prothomalo.com

RMG exports to all markets rise in first half of FY25
Staff Correspondent
Dhaka
Updated: 22 Feb 2025, 10: 30

A RMG factory Prothom Alo

Ready-made garment (RMG) exports have apparently rebounded with a notable surge in shipments to all major markets in the first six months of the 2024-25 fiscal year.

Exports to the European Union (EU), the United States, the United Kingdom, Canada, and other emerging markets have all increased. Except for the UK and emerging ones, all the markets registered growth over 10 per cent.

The RMG exports totaled USD 19.89 billion during the July-December period of the fiscal year, which is up by 13.28 per cent from USD 17.56 billion of exports recorded in the same period previous year.

Citing data from the Export Promotion Bureau (EPB), the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) noted that around 50 per cent of the total exports went to the European Union (EU) nations during the first six months of the current fiscal year. Exports to the EU reached USD 9.87 billion, which is 15.22 per cent higher than the previous year’s same period.

Among EU countries, Germany, Spain, the Netherlands, France, Poland, Italy, and Denmark imported more than USD 500 million worth of Bangladeshi garments. Except for Spain and Italy, exports to all these countries grew by over 10 per cent.

Germany remained the top European market during the period, importing USD 2.47 billion worth of garments. The figure is 14 per cent higher than its imports in the previous year's same period.

Meanwhile, exports to Spain reached USD 1.7 billion, France USD 1.09 billion, the Netherlands USD 1.06 billion, Poland USD 790 million, Italy USD 770 million, and Denmark USD 560 million. Among them, Poland saw the highest growth rate at 28 per cent, while Spain recorded the lowest at just under 3 per cent.

The US continued to be the largest market for Bangladesh as it accounted for 19-20 per cent of total RMG exports. The US imported RMG products worth USD 3.84 billion in the first half of the current fiscal year, which is 17.55 per cent higher than the previous year’s corresponding period.

Apparel exporters are seeing increased export opportunities in the US market as president Donald Trump imposed tariffs on imports from Canada, Mexico and China.

According to them, an additional 10 per cent tariff has been placed on Chinese products, which is expected to prompt US buyers to shift their purchase orders away from China, and create opportunities for the Bangladesh exporters to receive more orders.

Multiple traders told Prothom Alo that many US buyers had already started placing additional purchase orders even before the tariffs were imposed. The buyers are engaging in negotiations with factories and visiting Bangladesh to explore sourcing options.

Beyond the European Union and the United States, exports to the UK reached $2.16 billion in the first half of the current fiscal year, marking a 6.70 per cent rise compared to the same period last year. Exports to Canada totaled $640 million in the first half of the fiscal year, which is up by 14 per cent from the previous year’s corresponding period.

Bangladesh is also performing well in emerging markets as it exported $3.37 billion worth of RMG products to these markets in the first half, compared to $3.13 billion in the same period last year.

Among the new markets, Japan was the largest importer of Bangladeshi RMG products during the July–December period, with imports totaling $600 million. Exports to the Asian country rose by 5.7 per cent compared to the same period in the previous year.

Besides, exports to Australia reached $430 million, India $370 million, Korea $230 million, and Turkey $220 million. Growth rate was 7.5 per cent for exports to Australia, while 18 per cent for India, 2.84 percent for Korea, and 43 per cent for Turkey.

Mohammad Hatem, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told Prothom Alo that despite a rise in purchase orders, the key challenge is now the low price. Workers’ wages and other costs went up, but foreign buyers are offering lower prices than before. Hence, many purchase orders are not being accepted.

In response to another query, the BKMEA president said the textile mills are struggling to operate due to gas and electricity shortages. Hence, many RMG industry owners are importing yarn from India, which is eventually weakening the local textile mills.

He cited challenges over banking activities and law and order situations and feared that the positive trend in exports might not be retained had these internal issues not been addressed quickly.​

 

[Saif]

Bangladesh to surpass China in cotton imports

If this happens, Bangladesh will once again become the world’s top cotton importer, the position the country held multiple times before and after the pandemic.

en.prothomalo.com

Bangladesh to surpass China in cotton imports
The USDA’s October report had projected that global cotton imports for the 2024-25 trading year would reach 42.4 million bales, with China, Vietnam, Bangladesh, and Pakistan accounting for 65 per cent of the total

Shuvonkar Karmokar
Dhaka
Updated: 20 Feb 2025, 15: 01

Flags of Bangladesh and China

The US Department of Agriculture (USDA) has predicted that Bangladesh will surpass China in cotton imports—the primary raw material for the ready-made garment and textile sector—during the current 2024-25 trading year (August–July).

If this happens, Bangladesh will once again become the world's top cotton importer. The country has held this position multiple times before and after the COVID-19 pandemic.

According to a USDA report published last week, Bangladesh’s cotton imports are expected to reach 8 million bales by the end of the 2024-25 trading year, which began last August.

The agency previously predicted in October that imports would be 7.8 million bales, but it has now revised its estimate upwards. The increase in cotton imports is primarily driven by a rise in purchase orders for ready-made garments.

In the 2023-24 trading year, Bangladesh imported over 7.5 million bales of cotton. Notably, one bale is equivalent to 480 pounds or 218 kilogrammes.

Despite the USDA's forecast, textile mill owners in Bangladesh point out that most mills are not operating at full capacity due to the ongoing gas crisis, which has raised production costs.

Additionally, incentives for the sector were reduced last year. As a result, domestic yarn producers are struggling to compete with Indian yarn, leading to an increase in yarn imports from India.

The report estimated that China would import 8 million bales, Vietnam 7.1 million, Bangladesh 7.8 million, and Pakistan 4.8 million.

The USDA’s October report had projected that global cotton imports for the 2024-25 trading year would reach 42.4 million bales, with China, Vietnam, Bangladesh, and Pakistan accounting for 65 per cent of the total. The report estimated that China would import 8 million bales, Vietnam 7.1 million, Bangladesh 7.8 million, and Pakistan 4.8 million.

However, in its updated February report, the USDA revised its forecasts, stating that China’s cotton imports could decrease by 700,000 bales from the previous estimate.

Meanwhile, Vietnam, Bangladesh, and Pakistan are each expected to import more cotton—by 300,000, 200,000, and 200,000 bales, respectively. As a result, China’s total imports may fall to 7.3 million bales, while Vietnam’s and Pakistan’s imports could rise to 7.4 million and 5 million bales, respectively.

When asked about the USDA’s forecast, Bangladesh Textile Mill Owners Association (BTMOA) Director Khorshed Alam told Prothom Alo that while the prediction is theoretically correct, the reality is different. The estimate is based on the production capacity of factories, but in reality, 40-50 per cent of this capacity remains unused due to the ongoing gas crisis. As a result, the actual cotton imports will likely be lower than projected. Moreover, a significant portion of the imported cotton will come from India in the form of yarn.

Citing his own experience, Khorshed Alam said, “My two spinning mills always maintain a three-month stock of cotton. Since we are currently utilising only 50-55 per cent of our production capacity, we have not imported any cotton in the last four months.”

According to the USDA, Bangladesh imported 8.4 million bales of cotton in the 2021-22 trading year to meet the demand of its primary export sector. During the same period, China imported 12.7 million bales. However, China's imports declined significantly in the following year. In the 2023-24 trading year, China made a comeback, importing 14.9 million bales of cotton. This year, however, their imports have once again decreased sharply.

According to the National Board of Revenue (NBR), Bangladesh’s textile sector traders imported 1.889 million tons of cotton last year—an increase of 39 per cent compared to the previous year—at a cost of 453.74 billion taka. Additionally, 1.2 million tons of yarn were imported, amounting to 457.13 billion.

The Bangladesh Textile Mills Association (BTMA) reports that the country has 519 spinning mills, though some remain closed. These mills supply 85-90 per cent of knit fabric and around 40 per cent of the yarn used in woven fabrics.

Speaking at a program on Tuesday, BTMA President Shawkat Aziz Rasel stated that Bangladesh is self-sufficient in yarn production. However, due to the ongoing gas crisis, only half of the textile mills are operational, while the rest are either running at reduced capacity or have shut down entirely. Meanwhile, export-oriented readymade garment factories have strong purchase orders for the next three to four months, but local textile mills are struggling to supply the necessary yarn due to the energy crisis.​